Eichler, Tick/Trin divergence was the tipoff this AM, but I had to leave and could not afford to be wrong. So I booked profit where I had it (sigh). Did a small post on it on Steve's Channeling Thread before I had to leave.
========================================================
In the aftermath........
Once again we see no followthru.
Headfake above 2078 (a simply amazing battleground that has whipsawed others far better tham me several times.
I did a post on SI this morning about a negative divergence on the TICK/TRIN (but got no response - no respect for mish these days). Tick was +420 but TRIN suggested volume was on the SALES! But with no trailing stops I had a decision to make on my shorts from the day before. The bounce off 2078 got me. I did not want to be in losing QQQ's as well as losing shorts when I had a profit. A S/L would have worked today but these have too often turned a profit into a loss for me.
Took a lousy 1.5 on SEBL
Took a lousy 2.0 on VRTS
Still holding VRSN, now +2 but was underwater this AM(I refuse to cover for a loss anymore even though it rose against me this morning). Had I been even, I probably would have closed this out as well.
Entered QCOM short at 66+ (I just could not believe it co go any higher)
Still holding at +2.
Left over 5 points on the table on SEBL and if I was in it at this point I would put a S/L at 43 and let it ride. Mark my word, SEBL will hit 36 and I will have taken 1.5 points on it. A bummed out mish (but at least I was not whipsawed into going long).
Left over 5 points on the table on VRTS. BTW - VRTS is a true POS. ggg (that is for someone else Eichler not you).
Piss poor trading, although some might suggest it was good trading. I booked a profit and am still in my now slowly recovering QQQ's.
Where to from here.
We are in a stepping down pattern as follows
1) Selloff on everything
2) MSFT CSCO QCOM EBAY stop dropping
3) Everything else continues to get crushed
4) Rally on everything
5) Loop to #1 an repeat
They keep bouncing MSFT CSCO QCOM and EBAY back near local highs ralling the whole damn market with it. After the rally, other stuff immediately starts giving back gains while leaders hold. Everything drops then repeat.
They are slowly taking everything down but the leaders, used to keep the index up. Although we are only a couple hundred points from the top in April, does it seem like that to the holder of PMCS, JNPR, CIEN, AMD, NTAP, JDSU, EMC, or BEAS (among others)? In the meantime total garbage like ROOM is soaring out of sight. This suggest other insanity that will be corrected before all is said and done.
How long can MSFT keep holding this market up?
OTOH how low can we get if the leaders refuse to collapse? MSFT is THE BATTLE!
We all need to think long and hard about that last sentence.
I am now of the opinion that we may not see a retest of 1700 or perhaps not even 1800. The only way we get there IMHO is if MSFT crumbles.
Of course MSFT could crumble. Why not?
It is drastically overvalued. On a relative basis however, MSFT is a sterling buy compared to all this garbage like VRTS, VRSN, EBAY, etc etc etc.
Mish is crying for panic.
I do not care how low we go I just want a damn signal.
Hopefully it will happen in the first hour where I can recognize it, before I have to get to work!
The powers that be, refuse to let this damn market panic, however. It is torture for the bears and torture for the bulls.
It is also options expirations madness.
Oddly enough it is playing out in lines with my #1 scenario which was headfake up on YHOO earnings. MSFT "news" (staged and planned for in advance I believe) rallied the market far more than expected and rattled me quite a bit. Once again, however it was the SIREN song beconing longs to more torture. MSFT stays up and everything else drops back lower than it was before the last rally.
I know several bears that got whipsawed out and count me among them this am taking small profits but saying screw it (on my losses cause I am properly levereged and willing to ride these out come hell or high water). A good move cause I am in the plus column now on VRSN (yeah!).
Tiny profits, but profit is profit (I try to tell myself).
So where to from here?
It all depends on MSFT.
If MSFT cracks, we are headed for a retest of the lows.
If MSFT does not crack, a retest of 1950 or whatever could send this market back to 2300+.
Best guess at this point is a headfake below the prior low to suck in all the bears, MSFT stages a headfake collapse to 62, then one last mini-explosive rally up. If MSFT starts really cooperating, then we do not stop at 1800 but keep going until 1500 or so. Man will there be REAL bargains there.
So if you sense a small turn in my bearishness you are correct.
If we rise without panic it will not go as far or as fast. If we panic at 1800, there is easily 200-300+ naz points waiting and that is probably a 50% move for some of this crap. If we gap up at 1800-1900 without panic, we are just fooling ourselves and prolonging the agony. Best chance for a sustained rally is if we bottom at 1400 or so and then we might get 800 very quick points out of it!
That is how I see this playing out this summer-fall.
Now, will they try and prolong the agony or will they just let the damn thing fall?
We are now in a very tight coil IMHO, but is it stretched and ready to implode, or wound tighter than a drum? We will not stay within 100 poinst of 2078 forever! Options madness makes it harder to read IMHO. But, this sure seems like Feb where thay rallied everything one week early.
Impending piss poor news from INTC perhaps? Will close out all shorts tomorrow. Again I do not want to be wrong on shorts and options both.
M |
